Third quarter to be tough for Airtel and Idea Cellular: Citi

MUMBAI: A report by Citi Equity Research said that the third quarter would be weak with both Airtel and Idea likely reporting a quarter on quarter drop in mobile revenues.

'This would be due to mix of Jio’s free offer and demonetisation. While the latter’s impact should significantly reverse in 4Q, impact of Jio on voice realization and data usage should sustain,' stated the report.

It also adds how data realisation amongst will see a drop but may not see the spurt in usage. 'Data is a relatively more discretionary spend v/s voice hence would have felt a bigger impact of demonetization', stated the report.

The report also stated that the topline pressure and continued network expansion will hurt wireless margin – 'The expected qoq drop in wireless topline for Airtel and Idea accompanied by continued heavy investment in network is likely to lead to wireless EBITDA margin,' stated the report.